Tag: LIC IPO

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UPL Posts 29% YoY Rise in Q4 Net Profit – Top Indian Market News

UPL Q4 Results: Net profit rises 29% YoY to Rs 1,379 crore

UPL Ltd reported a 29% YoY increase in consolidated net profit to Rs 1,379 crore for the quarter ended March (Q4 FY22). Its revenue from operations grew 24% YoY to Rs 15,860 crore during the same period. The chemical manufacturer’s EBITDA stood at Rs 3,591 crore in Q4, up 26% YoY. UPL’s board has declared a dividend of Rs 10 per share.

UPL has settled a case with SEBI pertaining to the alleged failure to modify the terms of appointment of the auditor of its subsidiary. It has paid Rs 19.5 lakh towards settlement charges.

Read more here.

Vodafone Idea partners with SonyLIV to boost content offerings

Vodafone Idea (Vi) has partnered with SonyLIV to offer premium content services. SonyLIV is the video streaming platform from Sony Pictures Networks India. Vi has introduced a new add-on recharge of Rs 82, which will provide a free mobile-only subscription of SonyLIV Premium for 28 days and an added data benefit of 4GB with 14-day validity.

Read more here.

PVR Q4 Results: Net loss at Rs 105.5 crore

PVR Limited reported a consolidated net loss of Rs 105.49 crore for the quarter ended March (Q4 FY22). It had posted a net loss of Rs 289.21 crore in the corresponding quarter last year (Q4 FY21). Its revenue from operations jumped nearly three-fold to Rs 537.14 crore in Q4 FY22. The multiplex chain operator’s total expenses stood at Rs 731.17 crore, up 43.91% YoY.

Read more here.

L&T secures order from Jharkhand govt

Larsen & Toubro Ltd has secured a significant order (in the range of Rs 1,000-2,500 crore) from the Government of Jharkhand. The project aims to provide water to irrigate 22,283 hectares of culturable command area (CCA) in Dumka district by pumping water from the Sidheshwari river. The scope of the order includes survey, design, and construction of a barrage across the river.

Read more here.

Suven Pharma Q4 Results: Net profit rises 11% YoY to Rs 92 crore

Suven Pharmaceuticals Ltd reported a 10.3% YoY increase in consolidated net profit to Rs 91.66 crore for the quarter ended March (Q4 FY22). Net profit fell 42.7% when compared to the previous quarter. Its revenue from operations rose 40.54% YoY to Rs 364 crore during the same period. The pharma company’s board has declared an interim dividend of ₹1 per share.

Read more here.

Can Fin Homes clarifies on possible RBI probe into fraud detection

Can Fin Homes Ltd offered clarification on a possible Reserve Bank of India (RBI) probe into the detection of fraud in 37 accounts, saying it has not received any such information from the regulator. Earlier today, a media report claimed that RBI may launch a probe into the detection of fraudulent accounts in Can Fin Homes. The company further said the report is factually incorrect and that it is unaware of its source.

Read more here.

HCL Tech to acquire digital banking firm Confinale

HCL Technologies UK has signed a definitive agreement to acquire Switzerland-based Confinale AG, a digital banking and wealth management consulting specialist. With this acquisition, HCL Tech will expand its footprint in the global wealth management market. Confinale has one of the largest pools of Avaloq-certified specialists in Europe. It works with leading banks and wealth advisors. 

Read more here.

LIC IPO subscribed 2.94 times on final day of bidding  

The Rs 21,008.48 crore initial public offering (IPO) of Life Insurance Corporation of India (LIC) was subscribed 2.94 times on the final day of bidding. Retail investors have subscribed 1.98 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 2.91 times and 2.83 times, respectively, against their reserved portions. LIC policyholders have subscribed 6.09 times the portion reserved for them. 

Aarti Drugs Q4 Results: Net profit rises 7% YoY to Rs 55 crore

Aarti Drugs Ltd reported a 7.14% YoY increase in consolidated net profit to Rs 55.34 crore for the quarter ended March (Q4 FY22). Net profit fell 5% when compared to the previous quarter. Its revenue from operations rose 38.4% YoY to Rs 694.27 crore during the same period. The pharma company’s total expenses stood at Rs 626.73 crore in Q4, up 43.2% YoY.

Read more here.

SRF Q4 Results: Net profit rises 59% YoY to Rs 

SRF Limited reported a 59% YoY increase in consolidated net profit to Rs 605.65 crore for the quarter ended March (Q4 FY22). Net profit rose 19.8% when compared to the previous quarter. Its revenue from operations rose 36% YoY to Rs 3,549 crore during the same period. The company’s chemicals business posted a revenue of Rs 1,572 crore in Q4, up 36% YoY. 

SRF’s board has approved a project to set up dedicated facilities to produce key specialty products at its Dahej plant at an estimated cost of Rs 115 crore. They have also approved a project for capacity expansion at the Dahej plant at an approx. cost of Rs 30 crore.

Read more here.

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RIL Posts 22% YoY Rise in Net Profit in Q4 – Top Indian Market News

Reliance Industries Q4 Results: Net profit rises 22% YoY to Rs 16,203 crore

Reliance Industries Ltd (RIL) reported a 22.4% YoY increase in consolidated net profit to Rs 16,203 crore for the quarter ended March (Q4 FY22). Its revenue from operations grew 37% YoY to Rs 2,11,887 crore during the same period. The results are below Street estimates. Reliance Jio reported a 24.2% YoY increase in net profit to Rs 4,173 crore. The telecom major’s revenue grew 20.4% YoY to Rs 20,901 crore in Q4. RIL’s board has declared a dividend of Rs 8 per share.

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ONGC wins 18 out of 21 oil, gas blocks in OALP-VI bid round

Oil and Natural Gas Corporation (ONGC) has won 18 out of the 21 areas offered for finding and producing oil and gas in the sixth bid round under Open Acreage Licensing Policy (OALP). Oil India Ltd (OIL) has won rights for two blocks. Opening up more areas for exploration will help boost India’s oil and gas production and bring down high oil import bills.

Read more here.

Tata Power Q4 Results: Net profit rises 31% YoY to Rs 632 crore

Tata Power Company Ltd reported a 31% YoY increase in consolidated net profit to Rs 632 crore for the quarter ended March (Q4 FY22). Its revenue from operations rose 16% YoY to Rs 12,085 crore during the same period. EBITDA stood at Rs 2,253 crore in Q4, up 35% YoY. Tata Power’s board has declared a dividend of Rs 1.75 per share.

Read more here.

Federal Bank Q4 Results: Net profit rises 13% YoY to Rs 541 crore

Federal Bank reported a 13% YoY increase in net profit to Rs 540.54 crore for the quarter ended March (Q4 FY22). Its net interest income (NII) grew 7.38% YoY to Rs 1,525.21 crore during the same period. [NII is the difference between the interest income a bank earns on loans and the interest it pays depositors.] The gross non-performing assets ratio (GNPA) stood at 2.8% in Q4 FY22, compared to 3.06% in Q3 FY22. The bank’s provisions declined by 70.4% YoY to Rs 75.24 crore in Q4 FY22.

Read more here.

L&T Infotech announces merger with Mindtree

The Board of Directors of L&T Infotech Ltd (LTI) and Mindtree Ltd approved the merger of both the independently listed IT services companies under the Larsen & Toubro Group. The proposed integration will see LTI and Mindtree join to create a scaled-up IT services provider with a valuation of $3.5 billion. All shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree.

Read more here.

Bajaj Consumer Q4 Results: Net profit falls 34% YoY to Rs 36 crore

Bajaj Consumer Care Ltd reported a 34.5% YoY (or 6.7% QoQ) decline in consolidated net profit to Rs 35.82 crore for the quarter ended March (Q4 FY22). Its revenue from operations fell 12.2% YoY to Rs 214.95 crore during the same period. The FMCG company’s expenses stood at Rs 184.98 crore in Q4, down 2.21% YoY. Its board has declared a final dividend of Rs 4 per share.

SJVN secures contract for 30 MW wind-solar hybrid project worth Rs 195 crore

SJVN Limited secured a contract worth Rs 195 crore from the Solar Energy Corporation of India (SECI) for setting up a wind-solar hybrid project with 30 megawatts (MW) generation capacity. The state-owned company bagged the project through a tariff-based competitive bidding process for providing electricity at the rate of Rs 2.54 per unit on a build, own, and operate basis. The project is likely to generate ~1,860 million units (MUs) over 25 years.

Read more here.

Canara Bank Q4 Results: Net profit rises 65% YoY to Rs 1,666 crore

Canara Bank reported a 65% YoY increase in net profit to Rs 1,666.22 crore for the quarter ended March (Q4 FY22). Its net interest income (NII) grew 24.84% YoY to Rs 7,005 crore during the same period. The gross non-performing assets ratio (GNPA) stood at 7.51% in Q4 FY22, compared to 8.93% in Q4 FY21. The bank’s provisions rose 1.54% YoY to Rs 3,708.68 crore in Q4 FY22. The bank’s board has recommended a dividend of Rs 6.5 per share.

Read more here.

Lupin gets USFDA approval for Pregabalin capsules

Lupin Ltd has received approval from the US Food & Drug Administration to market Pregabalin capsules. The drug is used to treat pain caused by nerve damage due to diabetes or shingles infection. The product will be manufactured at Lupin’s facility in Aurangabad, Maharashtra. According to IQVIA data, Pregabalin capsules had estimated annual sales of $263 million (~Rs 2,024 crore) in the US during the 12 months ended March 2022.

Read more here.

LIC IPO subscribed 1.38 times on third day of bidding  

The Rs 21,008.48 crore initial public offering (IPO) of Life Insurance Corporation of India (LIC) was subscribed 1.38 times on the third day of bidding. Retail investors have subscribed 1.23 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 76% and 56%, respectively, against their reserved portions. LIC policyholders have subscribed 4.01 times the portion reserved for them. 

To learn more about the IPO, click here.

RBI approves merger between Equitas Holding and Equitas SFB

The Reserve Bank of India (RBI) has cleared the merger between Equitas Holdings and Equitas Small Finance Bank (SFB). The merger is being effected to comply with the RBI norms on small finance banks, mandating the promoter to reduce the stake in the subsidiary to 40% within five years of commencement of operations by the SFB.

Read more here.

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RBI Hikes Key Lending Rate to 4.4% – Top Indian Market News

RBI hikes key lending rate to 4.4%

The Reserve Bank of India (RBI) has raised its key lending rate (repo rate) by 40 basis points (bps) to 4.40% with immediate effect. RBI Governor Shaktikanta Das said the decision was taken in view of rising inflation, geopolitical tensions, and high crude oil prices, which have impacted the Indian economy.

Repo rate is the interest rate at which a central bank lends money to all the other banks in the country. A hike in repo rates makes bank loans costlier, leading to lower circulation of money in the economy.

Read more here.

Kotak Mahindra Bank Q4 Results: Net profit rises 65% YoY to Rs 2,767 crore 

Kotak Mahindra Bank reported a 65% YoY increase in net profit to Rs 2,767 crore for the quarter ended March (Q4 FY22). Its net interest income rose 18% YoY to Rs 4,521 crore during the same period. The gross non-performing assets ratio stood at 2.34% in Q4 FY22, compared to 2.71% in Q3 FY22. The bank’s board has declared a dividend of Rs 1.10 per share.

Read more here.

UPL acquires new naturally-derived fungicide

UPL Limited has acquired OptiCHOS, a naturally-derived fungicide, for its natural plant protection (NPP) business unit. The NPP portfolio houses natural and biologically derived agricultural inputs and technologies. UPL will identify potential markets for OptiCHOS and launch registration & approval processes to make the product available to farmers.

Read more here.

Tata Consumer Q4 Results: Net profit jumps 303% YoY to Rs 217 crore

Tata Consumer Products Ltd reported a 303.6% YoY jump in consolidated net profit to Rs 217 crore for the quarter ended March (Q4 FY22). Net profit fell 17.92% when compared to the previous quarter. Its revenue from operations grew 4.54% YoY to Rs 3,175.41 crore during the same period. EBITDA stood at Rs 444 crore in Q4, up 47% YoY. The FMCG major’s board has declared a final dividend of Rs 6.05 per share.

Tata Power Renewables commissions 120 MW solar project in Gujarat

Tata Power Renewable Energy Ltd (TPREL) has commissioned a 120 MW solar project in Masenka, Gujarat. TPREL is a wholly-owned subsidiary of Tata Power. The project will produce 3.05 lakh MWh annually for Gujarat Government (GUVNL) and reduce up to 1.03 lakh tonnes of carbon dioxide annually.

Read more here.

Havells India Q4 Results: Net profit rises 16% YoY to Rs 352 crore

Havells India Ltd reported a 16% YoY (or 15.20% QoQ) increase in consolidated net profit to Rs 352.48 crore for the quarter ended March (Q4 FY22). Its revenue from operations grew 33% YoY (or 22% QoQ) to Rs 4,426 crore during the same period. EBITDA stood at Rs 519 crore in Q4, up 2% YoY. Havells India’s board has declared a dividend of Rs 4.5 per share.

Alembic Pharma arm gets final USFDA approval for generic fever blisters drug

Aleor Dermaceuticals, a subsidiary of Alembic Pharmaceuticals, has received final approval from the US Food & Drug Administration (USFDA) for its generic Docosanol cream. The drug is used for the treatment of cold sore/fever blisters on the face or lips. According to IQVIA data, Docosanol cream had an estimated market size of $60 million for the 12 months ended December 2021.

Read more here.

Adani Green Energy Q4 Results: Net profit rises 16% YoY to Rs 121 crore

Adani Green Energy Ltd (AGEL) reported a 16% YoY increase in net profit to Rs 121 crore for the quarter ended March (Q4 FY22). Its total income rose 46.6% YoY to Rs 1,587 crore during the same period. AGEL, the world’s largest solar power developer, aims to build 45 gigawatts (GW) of renewable capacity by 2030.

LIC IPO subscribed 67% on first day of bidding 

The Rs 21,008.48 crore initial public offering (IPO) of Life Insurance Corporation of India (LIC) was subscribed 0.67 times (or 67%) on the first day of bidding. Retail investors have subscribed 0.6 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 0.27 times and 0.33 times, respectively, against their reserved portions. LIC policyholders have subscribed 1.99 times the portion reserved for them.

To learn more about the IPO, click here.

ABB India Q1 Results: Net profit jumps 164% YoY to Rs 373 crore

ABB India Ltd reported a 163.9% YoY jump in net profit to Rs 373 crore for the quarter ended March (Q1 CY22). The company follows the January-December financial year cycle. Its net profit rose 98.2% when compared to the previous quarter. The company’s total income grew 19.16% YoY to Rs 2,005.62 crore during the same period. ABB India develops, sells products and system solutions to industries, channel partners, and original equipment manufacturers in India.

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Life Insurance Corporation of India (LIC) IPO: All You Need to Know

The biggest initial public offering (IPO) in the history of the Indian stock market is here! Life Insurance Corporation of India has launched its IPO today— May 4. The Central Government aims to raise up to Rs 21,000 crore by divesting a 3.5% stake in the country’s largest life insurer. In this article, learn all about LIC and its IPO.

Company Profile – Life Insurance Corporation of India Ltd

Life Insurance Corporation of India was formed on September 1, 1956, by merging and nationalizing 245 private life insurance companies in India. It offers unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products. LIC is currently the largest entity in the Indian insurance space, with a market share of above 61.6% in terms of premiums. 

They also hold a 61.4% market share in terms of new business premiums (NBS) and a 71.8% market share based on the number of individual policies issued. [NBS is the premium acquired from new policies during a particular year.] More importantly, LIC is the fifth-largest insurer in the world in terms of gross written premiums (GWP).

LIC is a trusted brand in our country and has a customer-centric business model. It has been a security net for Indians. Over the years, the company has harnessed technological capabilities to support policyholders and drive operational efficiencies. 

Fact Sheet:

LIC’s total assets under management (AUM) stood at a whopping Rs 40.1 lakh crore as of December 31, 2021 (Q3 FY22). Interestingly, this figure is more than 3.2 times the total AUM of all private life insurers in India. It is more than 1.1 times the AUM of the entire Indian mutual fund industry’s AUM!

The company has a strong omnichannel distribution network, consisting of over 0.13 crore agents, 2,128 micro insurance agents, and 215 alternative channels. LIC operates through an extensive network of 2,048 branches and 1,559 satellite offices. [A satellite office is a branch of a larger company that is physically separate from the organization’s main office.] The insurer also operates in the UAE, Singapore, Fiji, Mauritius, Qatar, and the United Kingdom. 

The embedded value (EV) of LIC was estimated at Rs 5.4 lakh crore as of Q3 FY22. The EV of a life insurance company is the sum of the adjusted net asset value (NAV) and the present value of future profits. It is essentially the industry standard for valuing an insurance company. As per reports, the market valuation of LIC could be around 3-4 times the EV.

LIC is also the biggest player in India’s equity markets. As of Dec 31, 2021, its investments in listed shares represented ~4% of the total market capitalization of NSE! 

About the IPO

Life Insurance Corporation’s public issue opens on May 4 and closes on May 9. The company has fixed Rs 902-949 per share as the price band for the IPO.

The IPO is entirely an offer for sale (OFS) of 22.13 crore equity shares by the promoter (Government of India), aggregating to Rs 21,008.48 crore. Individual investors can bid for a minimum of 15 equity shares (1 lot) and in multiples of 15 shares thereafter. You will need a minimum of Rs 14,235 (at the cut-off price) to apply for this IPO. The maximum number of shares that can be applied by a retail investor is 210 equity shares (14 lots).

The government has announced a discount of Rs 60 per share for policyholders and Rs 45 for employees.

If you are a LIC policyholder and wish to apply for the IPO:

  1. Your PAN must be updated in LIC’s records.
  2. The PAN used for LIC policies has to be the same as that registered with your broker account.

The primary objective of the IPO is to provide an exit strategy (or liquidity) for LIC’s promoters. The company aims to achieve the benefits of listing the equity shares on NSE and BSE. The total promoter holding in LIC will decline from 100% to 96.5% post the IPO.

Financial Performance

LIC has posted strong growth in revenue and profits from FY 2019-21. The company’s total income increased by 9% YoY to Rs. 7,03,732.43 crore in fiscal 2021. It was due to higher net earned premiums and investment income. Meanwhile, net profit rose 9.73% YoY to Rs 2,974.14 crore in FY21. The net profit on sale/redemption of policyholders’ investments jumped 105% YoY to Rs 39,809.61 crore during the same period. 

The gross written premium (GWP) increased at a CAGR of 9.21% on a consolidated basis between FY19 and FY21. [GWP is the total premium an insurer writes during a specific period before deductions like reinsurance and ceding commissions.] Moreover, LIC’s 13-month persistency ratio increased from 66% in FY19 to 67% in FY21. This suggests growth in policyholders who renewed their policies.

It has an investment of Rs 38.4 lakh crore towards policyholders’ funds and is debt-free as of Dec 31.

Risk Factors

  • The ongoing Covid-19 pandemic could adversely affect LIC’s business aspects like agents’ abilities to sell products and increased expenses due to changes in mortality and investment portfolio.
  • The insurance industry is highly competitive. The company will be directly competing with leading private entities such as SBI Life, HDFC Life, and ICICI Prudential once it gets listed.
  • Volatility in capital markets, loss of customer confidence in the insurance industry, or a decline in customers’ financial positions could severely affect LIC’s overall performance.
  • Any unfavourable publicity concerning the insurance giant can harm its brand name and reputation.
  • The inability to retain and recruit individual agents at a reasonable cost and time could adversely impact LIC as individual agents procure most individual new business premiums.

IPO Details in a Nutshell

The book-running lead managers for the public issue are Axis Capital, Kotak Mahindra Capital, BofA Securities, Goldman Sachs (India), J.P. Morgan, etc. LIC filed the Red Herring Prospectus (RHP) for its IPO on April 26. You can read it here. Out of the total offer, 50% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.

Ahead of the IPO, LIC raised a massive Rs 5,627 crore from 123 anchor investors! The anchor investor portion of the IPO was also oversubscribed.

Conclusion

Insurance is not too popular in India, especially when it comes to life insurance. Only a marginal portion of the country holds life insurance. The total insurance coverage in India stood at a mere 3.76% in 2019. There can be a massive scale of development in this sector. Amidst the Covid-19 pandemic, the awareness towards securing insurance policies has increased. Whether it be health insurance or life insurance, more people are actively looking for the best products that can safeguard their future. Thus, LIC can capitalise on the high growth opportunities in the Indian life insurance sector. 

LIC’s maiden offer is expected to help the central government meet its disinvestment target of Rs 78,000 crore for FY22.

LIC’s IPO shares are trading at a premium of Rs 63 in the grey market. Before applying to this IPO, we will wait to see if the portion reserved for institutional investors gets oversubscribed. As always, consider the risks associated with the company and come to your own conclusion.

What are your views on LIC’s IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.

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Bajaj Finance Reports 80% YoY Rise in Q4 Net Profit – Top Indian Market News

Bajaj Finserv

Bajaj Finance Q4 Results: Net profit rises 80% YoY to Rs 2,420 crore

Bajaj Finance Ltd reported an 80% YoY (or 14% QoQ) increase in net profit to Rs 2,419.5 crore for the quarter ended March (Q4 FY22). Its net interest income (NII) rose 30% YoY to Rs 6,068 crore during the same period. The company’s assets under management (AUM) increased by 29% YoY to Rs 1.97 lakh crore. Its deposit book grew 19% YoY to Rs 30,800 crore in Q4 FY22. Bajaj Finance has declared a dividend of Rs 20 per share.

Read more here.

RIL, Ta’ziz sign shareholder agreement for Ruwais chemicals project

Reliance Industries Ltd (RIL) and Abu Dhabi Chemicals Derivatives Company RSC (Ta’ziz) have signed the formal shareholder agreement for the Ta’ziz EDC & PVC project. The joint venture will construct and operate a Chlor-Alkali, Ethylene Dichloride (EDC), and Polyvinyl Chloride (PVC) production facility, with a total investment of ~$2 billion. The project aims to strengthen domestic supply chains in the UAE.

Read more here.

L&T to partner with IIT Bombay for green hydrogen tech development

Larsen & Toubro (L&T) has partnered with the Indian Institute of Technology-Bombay to jointly pursue research and development work in the green hydrogen value chain. L&T’s engineering expertise, product scale-up, commercialization know-how, and IIT Bombay’s cutting-edge research in hydrogen technologies will help this partnership accomplish its goals. They aim to create scalable and cost-effective solutions in the green hydrogen space.

Read more here.

Sanofi India Q1 Results: Net profit rises 63% YoY to Rs 238 crore

Sanofi India Ltd reported a 63.4% YoY increase in net profit to Rs 238.4 crore for the quarter ended March (Q1 CY22). The pharma company follows the January-December financial year cycle. Its revenue from operations fell 2.5% YoY to Rs 707 crore during the same period. EBITDA stood at Rs 194.5 crore, up 2.7% YoY.

Read more here.

Amazon to continue arbitration against Future Group in Singapore: Report

According to an ET report, Amazon will go ahead with its arbitration proceedings against the Future Group in Singapore. It will raise the issue of the Indian group allegedly alienating its retail assets in favour of Reliance Industries (RIL). The Singapore International Arbitration Centre (SIAC) is likely to resume hearing the Amazon-Future Group dispute in the first or second week of May.

Read more here.

Adani Group in advanced talks to acquire Holcim business in India: Report

As per reports, the Adani Group is in advanced talks to buy Holcim’s cement business in India. The group could sign a deal to acquire a controlling stake in Ambuja Cements Ltd from Switzerland-based Holcim (the world’s largest cement maker). Currently, Holcim holds a 63.1% stake in Ambuja. 

Read more here.

Airtel Payments Bank partners with IndusInd Bank to offer FD facility to customers

Airtel Payments Bank has partnered with IndusInd Bank to offer fixed deposits for its customers. Users can open FDs starting from Rs 500 up to Rs 1.9 lakh in a few minutes through a digital process on the Airtel Thanks mobile app. Savings account customers will get a yearly interest rate of up to 6.5% and senior citizens will get an additional 0.5% on all FDs.

Read more here.

Atul Q4 Results: Net profit falls 22% YoY to Rs 136 crore

Atul Limited reported a 22.16% YoY decline in consolidated net profit to Rs 136.26 crore for the quarter ended March (Q4 FY22). Net profit fell 12.3% when compared to the previous quarter. The chemical manufacturer’s total income rose 22.75% YoY (or 0.6% QoQ) to Rs 1,392.64 crore during the same period. EBITDA stood at Rs 205.2 crore, down 19.35% YoY. Atul Ltd’s board has declared a dividend of Rs 25 per share.

HAL signs deal with BEL to make IRST system for Su-30 MKI jets

Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) signed a contract for the co-development and production of the Long Range Dual Band Infra-Red Search and Track System (IRST) for Sukhoi Su-30 MKI jets. The proposed IRST system will be a high-end strategic technology product in the field of defence avionics. It will enhance the Indian Air Force’s air superiority. 

Read more here.

Tata Teleservices Q4 Results: Net loss at Rs 280 crore

Tata Teleservices (Maharashtra) Ltd reported a net loss of Rs 280.62 crore for the quarter ended March (Q4 FY22). It had posted a net loss of Rs 288.3 crore in the corresponding quarter last year (Q4 FY21). The company’s revenue from operations rose 2.8% YoY to Rs 272.78 crore in Q4 FY22. Tata Teleservices is a broadband, telecommunications, and cloud service provider based in Mumbai. 

Read more here.

LIC IPO to open on May 4; price band set at Rs 902-949 per share

Life Insurance Corporation (LIC) has fixed a price band of Rs 902-949 per share for its Rs 21,000-crore initial public offering (IPO). There is a discount of Rs 60 for policyholders and a Rs 45 discount for employees. The IPO will open for anchor investors on May 2 and for other investors from May 4-9. The Indian government is looking to sell a 3.5% stake in the state-owned insurance company. 

Read more here.

Wipro to acquire 100% stake in Rizing for $540 million

Wipro Limited will acquire a 100% stake in US-based Rizing Intermediate Holdings for $540 million (~Rs 4,135 crore). The IT major aims to scale up its systems, applications & products (SAP) consulting capabilities through this acquisition. The transaction is expected to be completed before the quarter ending June 30 (Q1 FY23).

Read more here.

AU Small Finance Bank Q4 Results: Net profit jumps 105% YoY to Rs 346 crore

AU Small Finance Bank (SFB) reported a 105% YoY (or 16% QoQ) increase in net profit to Rs 346 crore for the quarter ended March (Q4 FY22). Its net interest income (NII) rose 43% YoY to Rs 937 crore during the same period. AU SFB’s board has declared a dividend of ₹1 per share. They have also recommended a bonus issue of one equity share for every one share held. 

Read more here.

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LIC IPO May Get Pushed to FY23 – Top Indian Market News

LIC IPO may get pushed to FY23 amid volatility 

The government may postpone Life Insurance Corporation’s (LIC) mega initial public offering (IPO) to the next financial year (FY23). The Centre is likely to hold a meeting to reassess the IPO timing amid market volatility due to the Russia-Ukraine war. On February 13, India’s largest life insurer had filed the Draft Red Herring Prospectus (DRHP) for a 5% stake sale by the government. You can read more about it here.

Read more here.

Vodafone Idea board approves Rs 14,500 crore fund-raising plan

Vodafone Idea Ltd’s board has approved a proposal to raise up to Rs 4,500 crore from its promoters– Vodafone Group and Aditya Birla Group – through a preferential share issue at Rs 13.30 a share. The board also cleared raising another Rs 10,000 crore via equity and debt instruments. The cash-strapped telecom operator is looking to strengthen its balance sheet and invest in network infrastructure after availing of a government bailout.

Read more here.

Tata Motors to deploy mobile showrooms in rural areas

Tata Motors Ltd will deploy over 100 mobile showrooms across India as part of an initiative to offer doorstep car buying experience in rural areas. The automaker has launched Anubhav, a showroom on wheels, in line with its rural marketing strategy. The initiative will help increase Tata Motors’ reach in rural areas, which have high potential in terms of population and economy.

Read more here.

LT Foods acquires 51% stake in Golden Star Trading

LT Foods Ltd announced the acquisition of a 51% stake in Golden Star Trading Inc. along with its brand Golden Star through its subsidiary LT Foods Americas Inc. (LTFA). LTFA is a material non-listed subsidiary of LT Foods. It contributes more than 35% to the overall revenue through its flagship brand Royal in North America. The acquisition entails strengthening the share of LTFA in the branded jasmine rice market.

Mahindra Finance’s disbursements up 44% at Rs 2,733 crore in February

Mahindra & Mahindra Financial Services Ltd’s loan disbursements rose 44% to Rs 2,733 crore in February. The collection efficiency during the month stood at 98%. The year-to-date (YTD) disbursement at approximately Rs 23,632 crore registered a yearly growth of 42%. The positive trend in collections led to a month-on-month improvement in asset quality.

Read more here.

Adani Ports achieves 14% growth in handled cargo volumes in Feb

Adani Ports & Special Economic Zone (APSEZ) Ltd handled cargo volumes of 24.15 million metric tonnes (MMT), registering a growth of 14.4% YoY. During the eleven months of FY22, APSEZ’s portfolio of ports handled a total cargo volume of 283 MMT, recording a 28% YoY growth.

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LTTS secures multi-year engineering contract from Airbus Group

L&T Technology Services Ltd (LTTS) has secured a multi-year contract from European aerospace major Airbus under its Engineering, Manufacturing Engineering, and Services Strategic Suppliers program. The engagement covers all Airbus divisions, subsidiaries, and affiliates. LTTS has scaled up operations across Airbus’ key geographic locations, including Toulouse (France), which will become the main R&D Centre of Excellence (CoE),

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TCS launches Enterprise 5G Edge Suite solutions

Tata Consultancy Services (TCS) has launched its Enterprise 5G Edge Suite of solutions with Microsoft Azure private mobile edge computing (private MEC). The suite brings comprehensive capabilities that help enterprises design, integrate, and operate an enterprise 5G edge ecosystem using the Azure private MEC solution. The new offering will serve various use cases, including bringing together enterprise assessment toolkits for edge and 5G readiness.

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Lupin gets USFDA approval to market Efinaconazole Topical solution in the US

Lupin Ltd has received approval from the US Food & Drug Administration to market Efinaconazole topical solution in the US market. The drug is used to treat fungal toenail infections. The product will be manufactured at the company’s facility in Pithampur, Madhya Pradesh. According to IQVIA-December 2021 data, Efinaconazole topical solution had estimated annual sales of $274 million (~Rs 2,078.6 crore) in the US.

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Market News Top 10 News

Hero MotoCorp, BPCL to Set Up EV Charging Infra – Top Indian Market News

Hero MotoCorp partners with BPCL to set up EV charging infra across India

Hero MotoCorp has partnered with Bharat Petroleum Corp Ltd (BPCL) to set up charging infrastructure for electric two-wheelers across India. The two entities will first establish a substantial charging infrastructure within the existing nationwide energy station network. They may broaden the collaboration to develop more synergies within the EV ecosystem and adjacent business verticals.

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Godrej Agrovet introduces new insecticide, eyes increased market presence

Godrej Agrovet Ltd (GAVL) has announced the launch of Gracia, an insecticide that helps control chewing and sucking pests in a variety of pulses and vegetable crops. The company believes the product will help strengthen its presence in the insecticides market. Gracia is a wide-spectrum product discovered and developed by Nissan Chemical Corporation Japan.

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Wipro invests in US-based AI start-up vFunction to boost cloud migration

Wipro Ltd has formed a joint go-to-market partnership with vFunction, a US-based start-up that has developed a scalable, AI-based technology platform. The partnership aims at modernising Java applications and accelerating migration to the cloud. Wipro Ventures, the IT major’s corporate investment arm, has invested in vFunction’s Series A funding round to deepen the strategic partnership.

Adani Group signs MoU with Ballard Power for hydrogen fuel cell JV

The Adani Group has signed a non-binding Memorandum of Understanding (MoU) with Ballard Power Systems to evaluate making a joint investment for the commercialization of hydrogen fuel cells in various mobility and industrial applications in India. Both parties will examine several options to cooperate, including potential collaboration for fuel cell manufacturing. Efforts under this MoU will be anchored by Adani New Industries Ltd (ANIL), a newly formed subsidiary of Adani Enterprises Ltd.

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Bharti Airtel likely to raise up to Rs 5,000 crore via rupee bonds

According to an ET report, Bharti Airtel Ltd is likely to raise up to Rs 5,000 crore through rupee-denominated bonds from the local market. The telco seeks to refinance high-cost debt and strengthen its balance sheet ahead of the 5G spectrum auction. It will be part of the Rs 7,500 crore fundraising plan announced by Bharti Airtel earlier this month.

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India expects fuel demand to grow 5.5% in FY23

Initial government estimates show that India’s fuel demand is likely to grow 5.5% in the next financial year (FY23). This reflects a pick-up in industrial activity and mobility after months of stagnation. India’s fuel consumption in FY23 (a proxy for oil demand) could rise to 214.5 million tonnes (MT) from the revised estimates of 203.3 MT for the current fiscal year. The estimates were released by the Petroleum Planning and Analysis Cell (PPAC).

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Marksans Pharma gets UK MHRA approval for Bells Healthcare’s all-in-one oral solution

Marksans Pharma Ltd. announced that UK Medicines and Healthcare products Regulatory Agency (MHRA) has granted market authorization to its subsidiary Bell Sons & Co. (Druggists) Ltd for Bells Healthcare All-in-One Oral Solution. The drug provides short-term symptomatic relief for colds, chill, and influenza. Mumbai-based Marksans Pharma is a global pharmaceutical company.

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There is a buzz and interest in market for LIC IPO, will go ahead with it: FM Sitharaman

Finance Minister Nirmala Sitharaman said the government will go ahead with the initial public offering (IPO) of Life Insurance Corp. of India despite market volatilities. “There is a buzz and interest in the market for the LIC IPO and we will be going ahead with it,” she said. LIC filed the draft red herring prospectus (DRHP) for its IPO with market regulator SEBI earlier this month.

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Samco Mutual Fund under fire from SEBI for misleading investors

Newly launched asset management company (AMC) Samco Mutual Fund has come under fire from SEBI for misleading investors during their maiden New Fund Offer (NFO). In January, Samco MF had kicked off their first NFO, Samco Flexi Cap Fund, publicizing it as a ‘pure’ equity scheme. 

Besides the equity component, the scheme intended to allocate up to 35% in TREPS (Tri-party repo dealing & settlement). Any allocation to TREPS is considered a cash call by the mutual fund scheme. Thus, SEBI is of the view was that any scheme with such a high cash allocation fails to be called a ‘pure’ equity scheme.

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Editorial

LIC Files DRHP for Rs 63,000 crore IPO: Key Takeaways

State-owned insurance giant Life Insurance Corporation of India (LIC) has filed the draft papers for its IPO with market regulator SEBI. It will be the biggest initial public offering (IPO) in the history of the Indian stock market! 

The IPO is completely an offer for sale (OFS) by the Government of India. The Centre will divest a 5% stake (or 31.6 crore shares) in LIC and is expected to raise up to Rs 63,000 crore. The valuation is not yet finalised. The proceeds from the public issue will be crucial to meet the government’s revised disinvestment target of Rs 78,000 crore in the current fiscal (FY22). Once listed, LIC would join the league of India’s biggest companies like Reliance Industries and TCS. 

Let us dive into LIC’s Draft Red Herring Prospectus (DRHP) and analyse certain interesting findings. 

Company Profile – Life Insurance Corporation of India 

Life Insurance Corporation of India was formed on September 1, 1956, by merging and nationalizing 245 private life insurance companies in India. It offers unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products. LIC is currently the largest company in the Indian insurance space, with a market share of above 64.1% in terms of premiums. 

They also hold a 66.2% market share in terms of new business premiums (NBS) and a 74.6% market share based on the number of individual policies issued. [NBS is the premium acquired from new policies during a particular year.] More importantly, LIC is the fifth-largest insurer in the world in terms of gross written premiums (GWP).

LIC is a trusted brand in our country and has a customer-centric business model. It has been a security net for Indians. Over the years, the company has harnessed technological capabilities to support policyholders and drive operational efficiencies. 

Factsheet:

LIC’s total assets under management (AUM) stood at a whopping Rs 39.55 lakh crore as of September 30, 2021 (Q2 FY22). Interestingly, this figure is more than 3.3 times the total AUM of all private life insurers in India. It is more than 1.1 times the AUM of the entire Indian mutual fund industry’s AUM!

The company has a strong omni-channel distribution network, consisting of 1.35 million agents, 3,463 micro insurance agents, and 174 alternative channels. LIC operates through an extensive network of 2,048 branches, 113 divisional offices, and 1,554 satellite offices. [A satellite office is a branch of a larger company that is physically separate from the organization’s main office.] The insurer also operates in the UAE, Singapore, Fiji, Mauritius, Qatar, and the United Kingdom. 

The DRHP states that LIC’s embedded value (EV) stands at Rs 5.39 lakh crore in Q2 FY22. The EV of a life insurance company is the sum of the adjusted net asset value (NAV) and the present value of future profits. It is essentially the industry standard for valuing an insurance company. As per reports, the market valuation of LIC could be around 3-4 times the embedded value.

LIC is also the biggest player in India’s equity markets. As of September 30, 2021, its investments in listed shares represented ~4% of the total market capitalization of NSE! 

As of Q2 FY22, LIC policyholders’ investment portfolio included:

  • Central government securities – 37.50% 
  • Equity securities – 24.78%
  • State government securities – 24.61% 
  • Corporate bonds – 8.07%

Financial Performance

LIC has posted a strong growth in revenue and profits over the past three financial years (FY19-21). The company’s total income increased by 9% YoY to Rs. 7,03,732.43 crore in fiscal 2021. It was due to higher net earned premiums and investment income. Meanwhile, net profit rose 9.73% YoY to Rs 2,974.14 crore in FY21. The net profit on sale/redemption of policyholders’ investments jumped 105% YoY to Rs 39,809.61 crore during the same period. 

The gross written premium (GWP) increased at a CAGR of 9.21% on a consolidated basis between FY19 and FY21. GWP is the total premium an insurer writes during a specific period before deductions like reinsurance and ceding commissions.

Get Ready for LIC’s IPO!

Insurance is not too popular in India, especially when it comes to life insurance. Only a marginal proportion of the country holds life insurance. The total insurance coverage in India was recorded to be just 3.76% in 2019. This shows that there can be a massive scale of development in this sector. Amidst the Covid-19 pandemic, the awareness towards securing insurance policies has increased. Whether it be health insurance or life insurance, more people are actively looking for the best products that can safeguard their future.

Thus, LIC can capitalise on the high growth opportunities in the Indian life insurance sector.

Employees and policyholders of LIC would get a discount over the floor price. Up to 5% of issue size can be reserved for employees and up to 10% for policyholders. The Centre aims to launch LIC’s IPO in March 2022.

If you are a LIC policyholder and wish to apply for the IPO:

  1. Your PAN must be updated in the LIC records.
  2. The PAN used for LIC policies has to be the same as that registered with your broker account.

You can read the Draft Red Herring Prospectus of LIC’s IPO here. What are your views on the IPO? Do let us know in the comments section of the marketfeed app. We will bring you a detailed article on the IPO once LIC announces the price band and other details.

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Editorial

The Hidden Danger in IPOs of 2021

The year 2021 saw a stream of Initial Public Offerings (IPOs) that entered many investors’ pockets. Companies from all sectors and industries tried to unlock their true value by listing on the stock market. According to credit rating agency India Ratings and Research (Ind-Ra), the financial year 2022 has the highest number of IPOs lined up in over two decades. A closer look at the 2021 IPO bull run shows that companies might have tried to list without sufficient reason or cause. The question is, can the recent and upcoming IPOs sustain investor gains? Are the listed companies overpriced? Have the IPO-raised funds been used in the right manner? Read on to know more.

Are IPOs Overpriced?

A total of 72 companies had their IPOs in FY22. Between January and November, 38 out of 52 mainboard IPOs ended up with listing gains. Listing gains happen when a company’s share debuts at a higher price than what the IPO subscribers bought it for. Based on the issue size, the top 10 companies gave average listing gains of nearly ~17%. 

According to Ind-Ra, the IPO count for FY22 stood at 71, amounting to Rs 85,600 crores as against Rs 27,200 crore raised by 56 companies last year. Life Insurance Corporation or LIC is planning to raise nearly Rs 1,00,000 crore through an IPO. If it happens by year-end, it could drive the total issue size for the fiscal to nearly Rs 2,00,000 crore. The IPO bull run is being led by the new-age tech-oriented companies like Zomato, Nykaa, PayTM, Policy Bazaar, to name a few. Unlike traditional companies, new-age tech-oriented companies are listing for brand recognition and premium value unlocking. 

IPOs Not Helping In Cutting Down Corporate Debt?

According to Ind-Ra, 26% of the companies used the funds for corporate purposes, 19% used them for funding capital expenditure, another 19% used them for repayment of existing loans, and the remaining 11% used it to carry out an offer for sale. 

There has been a shift in trend regarding objects of offer that a company mentions in Red Herring Prospectus (IPO Report). While the purpose of an IPO is generally considered to be either for funding capital expenditure or repaying existing debt, many companies have clearly stated ‘brand recognition’ as the sole reason. 

The availability of cheap Commercial Paper (CP) has also fueled the IPO of Bullrun. CPs are borrowings made from NBFCs for short-term use (up to one year). IPO Investors, mostly institutional ones, would borrow from Non-Banking Financial Companies (NBFCs) to fuel their IPO gig. The Reserve Bank of India has now capped an individual borrowers limit for NBFCs to Rs 1 crore. This move could significantly impact the subscription status of the IPOs.

The Way Ahead

The bull run in 2021 was fuelled by the enormous liquidity offered by monetary and fiscal easing. Once the central banks start cutting interest rates, the money could make its way out of the recent IPO stocks, many of which are known to be overvalued. 

Another cause of worry is the reason why certain companies got listed. Many have done so with the intent of getting a premium valuation from the hype caused by retail and institutional investors alike. If a company does not utilize the IPO funds correctly, it might face operational or financial bottlenecks in the future, which could be the reason for the investor’s dissatisfaction. This dissatisfaction could drive down the valuation of the company. The upcoming quarter is crucial for the stock market. With fears regarding the Omicron variant of COVID-19, sensitive oil prices, and interest rate cut expectations, investors need to weigh their investments in light of these risks and make the right choices.